Cheap Toys sells merchandise to the general public for cash or credit. It accepts several major credit cards. The company pays an average fee of 4% of sales to the credit card companies and 6% to the State of Florida in sales taxes.
A customer comes to the store and makes a purchase of $10,000. Mark, the store owner, tells the customer that if she pays cash, he will give her a 7% discount. The customer accepts.
Does Cheap Toys lose money on this deal. Why would Mark do it? Is it ethical?